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The End of Facebook Commerce?
As more retailers back away from failing Facebook stores, SeeWhy’s Charles Nicholls examines the flaws in the F-commerce model.
According to a recent Bloomberg article, GameStop, Gap Inc., J.C. Penney and Nordstrom have all closed their Facebook storefronts over the past year. This shouldn’t be a surprise. While Facebook may be the most visited website, with 845 million members, consumers go there to hang out, not shop. Sucharita Mulpuru, an analyst at Forrester Research, refers to this as “like trying to sell stuff to people while they’re hanging out with their friends at the bar.”
For brand marketers, Facebook is a great place to engage directly with consumers, build relationships and drive traffic to their e-commerce sites. But Facebook as a shopping destination? With a few notable exceptions (inherently social businesses such as music, games and entertainment), it just doesn’t make sense to invest in a Facebook storefront. But using Facebook to drive traffic to your e-commerce site is a well proven and very effective method of driving high quality traffic to the site.
A year ago, we stuck our necks out and called the Facebook commerce baby “ugly.” Despite all the hype, we advised steering clear of Facebook storefronts and focusing on e-commerce social integration via plugins (Forget Selling on Facebook (for now) – Think Social Plugins). Since our original post last year, the picture has become more complex since many consumers now have a variety of devices for socialising, researching and shopping. This fascinating infographic from the Internet Advertising Bureau shows how different devices are used for different purposes during the day.
Note how desktops are considered more secure (68%) and great for storing important information (72%). By comparison, the benefits of smartphones are ‘Keeping in touch on the move’ (95%) and ‘Socialising with others’ (78%).
While consumers will undoubtedly use a variety of devices, their preferred device for shopping is a desktop/laptop and an e-commerce site. And a mobile e-commerce site is preferred over a smartphone app.
This data suggests that brand marketers should focus on optimising their e-commerce sites for purchases on desktop/notebooks and tablets, and their mobile sites for researching future purchases. It also suggests that mobile shopping apps are a distraction for both merchants and consumers and will fail for many of the same reasons why Facebook stores have failed.
Here’s why consumers don’t want to shop on Facebook:
Currently, consumers aren’t going to social networks to shop, but instead to socialise, have fun and share. This shows a disconnect between the way some brand marketers view social networking sites (as a channel to sell more) and the way that consumers view them (as a way of interacting and having fun).
Cannibalising, not additive
Of the limited number of success stories for Facebook stores, a common theme emerges: promotions. Promotions are effective in driving traffic to the Facebook store and securing a conversion. But our issue with these promotions is that they can be used to drive traffic to the e-commerce store just as effectively, where the buyer will most likely spend more than they would on Facebook. Until evidence emerges that Facebook storefronts are additive and create incremental sales, they are doomed to failure. What we should be thinking more about is how we can make shopping inherently more social, rather than cannibalising e-commerce sales with promotions just to promote a different storefront.
Facebook, in particular, has a troubled relationship with its users when it comes to privacy. And several studies have shown that the majority of social network users are unwilling to shop on a social network due to security and privacy fears. What will Facebook do with my information if I do shop there?
Facebook stores have a more limited range than the full store, so it’s inevitable that serious shoppers will navigate to the main e-commerce store. Limited ranges also lead to lower average order values.
Another negative impact of a Facebook store is that there is a reduced screen width in which to display merchandise. This leads to a practical limitation of a three or four column grid for displaying products, smaller images, and the right hand column being reserved for advertisements.
This is also a major limitation when considering mobile sites and apps where the screen size limits the images, download speeds limit the quality, and for apps, limited ranges typically apply.
There are, of course, always exceptions where there is an inherently social aspect to the business, and Facebook commerce can thrive. But for the majority of brands and merchandisers, it just doesn’t make sense. In the end, the focus should remain on making ecommerce more social and accessible for different device types.